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on Insurance Economics |
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Issue of 2017‒11‒19
nine papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Baris K. Yörük |
| Abstract: | This paper investigates the impact of the Affordable Care Act’s (ACA’s) dependent coverage mandate on health insurance coverage rates and health care utilization among young adults. Using data from the Medical Panel Expenditure Survey, I exploit the discontinuity in health insurance coverage rates at age 26, the new dependent coverage age cutoff enforced by the ACA. Under alternative regression discontinuity design models, I find that 2.5% to 5.3% of young adults lose their health insurance coverage once they turn 26. This effect is mainly driven by those who lose their private health insurance plan coverage and those who lose their health insurance plan coverage, whose main holder resides outside of the household. I also find that the discrete change in health insurance coverage rates at age 26 is associated with significant changes in office-based physician and dental visits, but does not have a significant impact on the utilization of outpatient or emergency department services. Furthermore, the effects of the ACA’s dependent coverage mandate on health care spending and out-of-pocket costs are insignificant. These results are robust under alternative model specifications. |
| Keywords: | affordable care act, health insurance coverage, health care utilization, dependent coverage |
| JEL: | I12 I13 I18 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6277&r=ias |
| By: | Chiara Canta; Helmuth Cremer; Firouz Gahvari |
| Abstract: | We study the role and design of private and public insurance programs when informal care is uncertain. Children’s degree of altruism is randomly distributed over some interval. Social insurance helps parents who receive a low level of care, but it comes at the cost of crowding out informal care. Crowding out occurs both at the intensive and the extensive margins. We consider three types of LTC policies: (i) a topping up (TU) scheme providing a transfer which is non exclusive and can be supplemented; (ii) an opting out (OO) scheme which is exclusive and cannot be topped up and (iii), a mixed policy combining these two schemes. TU will involve crowding out both at the intensive and the extensive margins, whereas OO will crowd out informal care solely at the extensive margin. However, OO is not necessarily the dominant policy as it may exacerbate crowding out at the extensive margin. The distortions of both policies can be mitigated by using an appropriately designed mixed policy. |
| Keywords: | long term care, uncertain altruism, private insurance, public insurance, topping up, opting out |
| JEL: | H20 H50 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6290&r=ias |
| By: | Sally Owen; Ilan Noy |
| Abstract: | Natural hazard insurance is almost always provided through public-private partnerships. Given the dominant role of the public sector, it is surprising that equity issues have not faced more scrutiny with respect to the design of hazard insurance. We provide a detailed quantification of the degree of regressivity of the New Zealand earthquake insurance program – a system that was designed with an egalitarian purpose. We measure this regressivity as it manifested in the half a million insurance claims that resulted from the Canterbury earthquakes of 2011. As in other cases, this can be remedied with modifications to the program’s structure. |
| Keywords: | insurance, redistribution, regressivity, tax |
| JEL: | D30 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6540&r=ias |
| By: | Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus, Turkey, Department of Economics, University of Pretoria, Pretoria, South Africa and Montpellier business School, Montpellier, France); Rangan Gupta (University of Pretoria, Pretoria, South Africa); Chien-Chiang Lee (Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan); Godwin Olasehinde-Williams (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus, Turkey) |
| Abstract: | Just as the world has witnessed the increased importance of the insurance sector over the past few decades, it has also witnessed a sharp rise in risks and uncertainties. Surprisingly, studies analyzing the relationship between economic policy uncertainty and the insurance sector are almost non-existent. Also, a major limitation of insurance literature is the choice of methodology. Most studies about the insurance sector do not take into consideration issues of heterogeneity and cross-sectional dependence, and are therefore subject to errors. To address the identified gaps, this study investigates the impact of economic policy uncertainty on insurance premium growth, controlling for the effect of real output, in a panel of 19 countries over the period 2003-2016 by employing heterogeneous panel estimation techniques with cross-sectional dependence. CADF and CIPS unit root tests conducted show that each of the variables becomes stationary after first difference. The Westerlund (2007) cointegration test results confirm that a long-run relationship exists between the variables. Findings from the error correction based panel estimations show that the insurance sector is not immune to the effects of economic policy uncertainty and real output. Economic policy uncertainty raises insurance premiums in the short run and lessens it in the long run whereas real output increases insurance premiums both in the short and long run, although its long run impact is greater than the short run impact. Also, economic policy uncertainty exerts a bigger influence on non-life insurance premium than on life insurance premium. |
| Keywords: | Economic policy uncertainty, insurance premium, short- and long-run relationships |
| JEL: | C33 G22 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201776&r=ias |
| By: | Owen, Sally Margaret Frean |
| Abstract: | This thesis examines the question “What have been the distributional implications of the setup of Earthquake Commission (EQC) building cover for New Zealand homeowners?†In New Zealand, the vast majority of property owners pay identical premiums for the benefit of the first $100,000 tranche of natural disaster cover per dwelling. The research provides a detailed quantification of the degree of regressivity of the scheme created by these flat premiums. Using EQC claims and property datasets relating to the Canterbury Earthquake Series, I test the hypothesis that wealthier homeowners are receiving more benefit. Wealth is identified by property value, income and a range of socio-economic variables collected from the most recent New Zealand Census before the earthquake series. In explaining EQC total dwelling payout by property value and by these socio-economic variables, the research shows there is a distributional implication to EQC’s building cover. This thesis includes a proposed modification to the premium structure of the scheme, whereby regressivity could be avoided. The research concludes with a survey of other public natural disaster insurance schemes worldwide, and identifies those likely to face similar regressivity issues. |
| Keywords: | Regressivity, EQC, Earthquake Commission, Public, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwecf:6720&r=ias |
| By: | Piero Gottardi; Vincent Maurin; Cyril Monnet |
| Abstract: | We show that repurchase agreements (repos) arise as the instrument of choice to borrow in a competitive model with limited commitment. The repo contract traded in equilibrium provides insurance against fluctuations in the asset price in states where collateral value is high and maximizes borrowing capacity when it is low. Haircuts increase both with counterparty risk and asset risk. In equilibrium, lenders choose to re-use collateral. This increases the circulation of the asset and generates a "collateral multiplier" effect. Finally, we show that intermediation by dealers may endogenously arise in equilibrium, with chains of repos among traders. |
| Keywords: | repos, collateral multiplier, limited commitment, intermediation |
| JEL: | G19 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6579&r=ias |
| By: | Gal, Jens; Gründl, Helmut |
| Abstract: | Coming (great) events cast their (long) shadow before. As the financial crisis gave birth to the creation of the European System of Financial Supervision (ESFS), the imminent Brexit now serves as an impulse to rather extensively reorganize it. Pursuant to the preferences of the Commission-as revealed in its draft for a regulation amending the regulations founding the European Supervisory Authorities (ESA)-the supervision (and regulation) of the financial sectors should be further centralized and integrated and additional powers should be given to the ESAs. To a large degree these alterations are intended to adjust the competences of the European Securities and Markets Authority (ESMA) to better meet its new objectives under the Capital Markets Union ('CMU'). In view that an equivalent to the CMU or the Banking Union-in the sense of a European Insurance Union-is not yet on the horizon for the insurance sector (or the occupational pensions sector), one could prima vista take the view that insurance supervision and regulation is once again taken captive by the necessity of regulatory reforms stemming from other financial sectors. However, even if that is partially the case, the outcome of the intended reforms might still be advantageous for the insurance sector and an important step in the right direction. Therefore, it needs to be intensively discussed. At this stage, some of the most prominent envisioned changes to the structure, tasks and powers of the European Insurance and Occupational Pensions Authority (EIOPA) and their necessity, usefulness or counter-productivity still have to be examined. |
| Keywords: | European Insurance Union,European Supervisory Authorities,EIOPA,European Insurance and Occupational Pensions Authority,Insurance Supervision |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safepl:60&r=ias |
| By: | Richard Murphy |
| Abstract: | This paper proposes an explanation of why union membership has been increasing in some occupations, despite the opportunity to freeride on traditional union benefits. I model membership as legal insurance whose demand increases with the perceived risk of allegations. Using media reports on allegations against teachers as shocks to perceived risk, I find for every five reports occurring in a region, teachers are 2.5 percentage points more likely to be members in the subsequent year. These effects are larger when teachers share characteristics with the news story and explain 45 percent of the growth in teacher union membership since 1992. |
| Keywords: | unions, teachers, media, insurance |
| JEL: | J51 J45 J32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6362&r=ias |
| By: | Jenna Libersky; Julie Stone; Leah Smith; James Verdier; Debra Lipson |
| Abstract: | To improve the value of care provided in nursing facilities, payers are experimenting with value-based payment (VBP) approaches that link financial rewards to measures of quality. Drawing on findings from interviews with state officials and plan representatives, this brief describes the VBP approaches that select states and managed care plans currently use, presents perceived effects of VBP, and shares lessons on the design and administration of VBP programs. |
| Keywords: | Value-Based Purchasing, Nursing Facility, Managed Care, Value-Based Payment, quality, VBP, Medicare, Medicaid |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:48f9a5b442a243eaa485b5f5d22e432a&r=ias |